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Explain in detail how a MODERATE attitude towards risk can impact the investor's investment plans and...

Explain in detail how a MODERATE attitude towards risk can impact the investor's investment plans and outcomes. Please provide examples. (A moderate investor values reducing risks and enhancing returns equally)

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Answer : A Moderately Conservative investor tries to its main investment amount , but is comfortable accepting a small degree of risk and volatility to seek some degree of appreciation. This investor desires greater liquidity, is willing to accept lower returns, and is willing to accept lest losses.

A Moderate investor values reducing risks and enhancing returns equally. This investor is willing to accept modest risks to seek higher long-term returns. A Moderate investor may accept the investment plans with the less liquidity.

Example :

A moderate portfolio of mutual funds is appropriate for an investor with a medium risk tolerance and a time horizon longer than five years. Moderate investors are willing to accept periods of moderate market volatility in exchange for the possibility of receiving returns that outpace inflation by a significant margin.

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